Cathie Wood sells her remaining position in the Grayscale Bitcoin Trust due to the uncertainty of successfully converting to an ETF.
Cathie Wood’s ARK Next Generation Internet ETF has undergone a significant shakeup in its Bitcoin-related holdings, selling its remaining position in the Grayscale Bitcoin Trust due to uncertainty over the possibility of successfully converting to an exchange-traded fund (ETF).
According to Bloomberg, the ETF sold its remaining 2.25 million Grayscale Bitcoin Trust shares on Wednesday. On the same day, it acquired 4.32 million shares of the ProShares Bitcoin Strategy ETF, which invests in Bitcoin futures, thus becoming the second largest holder of the fund, according to the investment firm’s daily data.
This portfolio restructuring comes amid a race in the industry to gain US regulatory approval for the first ETF to invest directly in the largest cryptocurrency.
Wood Offers Move Details
Wood stated on Bloomberg Television that the move was made “without much caution” in case the conversion of the Grayscale trusts to an ETF is not approved by US regulators in early January. Many observers expect the Securities and Exchange Commission (SEC) to give the green light to America’s first spot Bitcoin ETF at the time.
Wood also noted that Grayscale Trusts’ previous significant discount to its net asset value has decreased considerably, which was “double good news for us” when combined with its price increase.
The SEC has a deadline of Jan. 10 to decide whether to approve a Bitcoin ETF application filed by Wood’s ARK Investment Management LLC and 21Shares, along with possibly other similar filings.
“We think the odds have increased because the SEC has been very compromised compared to what was happening before,” Wood said on Bloomberg TV on Thursday. However, he warned that approval “is not 100% certain.” “We don’t know exactly who will be approved and whether they have met all the criteria that the SEC has presented to us,” she said. “We are as bullish on Bitcoin as we have ever been.”
What’s Up with Cathie Wood’s ETF?
ARK has been reducing its holdings in the Grayscale Bitcoin Trust in recent months, even as Bitcoin hit its highest level since April 2022. The cryptocurrency has more than doubled in 2023, with much of the gains coming towards the end of the year due to speculation that the SEC will finally approve Bitcoin ETFs early next month.
Bitcoin fell 2.1% to $42,472 as of 5 p.m. in New York, while the Grayscale Bitcoin Trust closed 4% lower.
Earlier this week, Grayscale Investments announced that Barry Silbert, founder and CEO of its parent company Digital Currency Group, has resigned as president and will be succeeded by Mark Shifke, DCG’s chief financial officer. The board reorganization was seen by some as a positive step by Grayscale to obtain SEC approval to convert its fund into an ETF.
Wood touted the Grayscale Bitcoin Trust as her top pick at the Sohn Australia conference last month.
Also on Wednesday, the ARK ETF bought 20,000 shares of the ARK 21Shares Active Bitcoin Futures Strategy ETF and sold 148,885 shares of the cryptocurrency exchange Coinbase Global Inc., according to the funding report.
The ARK Next Generation Internet ETF is up 103% this year, compared to a 55% advance in the Nasdaq 100 Index. However, the financial path has been volatile: it fell 67% in 2022.
By Leonardo Perez
